Dear WashU faculty and staff,

I write to you today to share an overview of WashU’s financial outlook with a focus on two distinct but important updates: our Board-approved university operating budget, and our latest endowment returns. Our story is multilayered, and it is important that I provide the context around these numbers, particularly as we look to advancing our mission with even greater impact into the future.

First, our operating budget, which supports the vast majority of the university’s annual spending. The headline is that, because of your efforts, we are gradually strengthening our overall financial position. Over the past 18 months, as a university we have taken a much more disciplined approach to our finances. I recognize the strain this has placed on our faculty and staff — from the emotional toll of layoffs to the additional responsibilities and hours that many have taken on — and I am enormously grateful for the sacrifices you have made. Through these efforts, we finished FY26 with a slight surplus of 2.1%, rather than the shortfall we had anticipated. In context, this amounts to approximately $112 million, largely attributable to the strong clinical performance at WashU Medicine.

For FY27, the Board of Trustees approved an operating budget of approximately $5.48 billion with a less than 1% surplus. Similar to FY26, the FY27 budget anticipates a solid positive margin at the Medical School with collective budgetary challenges remaining for the Danforth schools.

To be clear, while we are working toward our goal of strengthening our overall financial position, significant headwinds remain, including the need to balance all budgets across the Danforth schools. We face an uncertain external environment, with continued insecurity around the future of federal research funding, as well as Medicare and Medicaid reimbursement rates, which directly impact our financial health. Against this backdrop, we must continue to exercise fiscal discipline, while doing everything possible to recognize and reward the extraordinary efforts of our people.

Our operating budget and our endowment play discrete but complementary roles in supporting the university. I am pleased to share that WashU’s endowment had an extraordinary year, with a 37.3% YoY increase as of June 30, 2026 for a total of $17.7 billion. That performance, likely to be among the very best in the country, strengthens our ability to fulfill our mission today and moreover, extend its impact into the future. I am incredibly grateful to the donors who have made this endowment possible, and to the WashU Investment Management Company for their exceptional stewardship.

While we celebrate this success, it is important to note that our endowment is not a single pool of discretionary funds. Rather, it is made up of thousands of individual gifts, many designated by donors for specific purposes such as financial aid, endowed professorships, research, and academic programs. We have both a legal and ethical obligation to honor those commitments, while stewarding these resources for future WashU faculty and students who will continue to advance our mission. Each year, the university distributes a portion of the endowment to support its designated purposes, while the balance remains invested for future generations. As a result of this year’s strong performance, we expect a healthy increase in our endowment payout rate for FY28, and we look forward to sharing additional details about this in the coming months.

Again, I want to acknowledge the sacrifices you have made to strengthen our position and live our mission. The work you do — forming leaders, discovering knowledge, and treating patients for the betterment of our region, our nation, and our world — is more vital than ever. Thank you for your extraordinary commitment to WashU and to the work ahead.

Sincerely,

Andrew D. Martin